Questions about Travel Expenses

[TaxTax]

Hello first of all why do I have these questions?

I am trying to set up a UK configuration of a software dealing with travel expenses so I have been reading the related sources HMRC EIM and 490 and such but the examples or the description does not answer all of my questions so hopefully someone could lend a helping hand right here.



1. When I stay in a serviced flat abroad I can claim only 30% or so of the residual rate of the location, when I stay at a colleagues house I can claim only 10% plus possible meals. And also when I get a dinner for example paid by the employer I have to reduce my claim by the rate for a dinner , always the rate or in case of a receipt the actual value of the dinner?

None of these rules apply for UK based travel? Because as I read there is no set benchmark rate within the UK for overnight stays, only the rates for breakfast, 1 meal, 2 meal and late meals? If I stay with friends or family I get nothing except relief for meals?



2. About the abroad subsistence scale rates.

For some countries the dinner or even lunch rates are higher than the 5+ hour rates. So what happens if you can claim only the 5 hour rate but you receive a free dinner. You would have to substract the dinner from your travel expenses which results in a loss, so the difference is taxable as salary?

3.

2 x 24 hour rate (15.00 Monday to 15.00 Wednesday) 708 Swiss francs
Wednesday night (room rate) 203 ,, ,,
10 hour rate (15.00 Wednesday to 09.00 Thursday) 114 Swiss francs less dinner rate 67 Swiss francs 47 ,, ,,
Total 958 Swiss francs

This is the example the HMRC uses but on the other hand they say that employers should only use the hourly rates OR the individual meal rates. But in this example they use the hourly rates and then substract an individual meal rate which could in theory produce the scenario I am wondering about in the previous post.

4.

example:

Person A travels from London to Manchester on a business trip. The trip lasts 80 hours.

Would that person be able to get relief for breakfast, 2 meal and late dinner? How would the time spans be calculated?

If he arrives on Monday 8pm and leaves Friday at 4am is it calculated like for travel outside of the UK?

Mon 8pm - Tue 8pm -> 24h = 10 hour rate, breakfast and late meal
Tue 8pm - Wed 8pm -> 24h = 10 hour rate, breakfast and late meal
Wed 8pm - Thu 8pm -> 24h= 10 hour rate, breakfast and late meal
Thu 8pm - Fri 4am -> 8h = 5 hour rate

this is how the HMRC calculates in their examples for travel outside of the UK

OR

Mon 8pm - Mon 12pm -> 4 hours = nothing or would the time qualify to get late dinner?
Tue 0am - Tue 12pm -> 24h = 10 hour rate, breakfast and late meal
Wed 0am - Wed 12pm -> 24h = 10 hour rate, breakfast and late meal
Thu 0am - Thu 12pm -> 24h = 10 hour rate, breakfast and late meal
Fri 0am - Fri 4am -> 4 hours = nothing or would this qualify for breakfast?

Since there is no 5/10/24 hourly scale rates for travel within the UK I guess the 2nd model makes more sense so you would have to calculate differently for travel outside the UK and travel within the UK?

5. About the subsistence rates. Can I always claim the breakfast/one meal/two meal/late maximum rate or only actuals based on receipts with the rate simply being the maximum an employer could reimburse without paying tax? Again this comes down to travel within the UK where from my understanding you can not but abroad you could simply claim the benchmark scale rate values that HMRC sets for the country/city?

[cojak]

I never have this problem as I always get receipts. I do have a small daily subsistence allowance to cover minor expenses but it's generally less than £10 per day.

I always ask my accountant where I'm going and how much I can claim before traveling...

If I stay with friends or family I get nothing except relief for meals?

Why should you get anything? You haven't spent anything.

I wouldn't use any expenses application that relied on 'rates' and 'rules'. As HMRC would say, it's your responsibility to get this stuff right and hoping that software would do it for you is a bit dodgy.

I use Expense Tracker that keeps receipt info and photos (and exchange rates, for that matter)...

[LisaContractorUmbrella]

THE HMR&C expenses manual is absolutely vast and the section on travel is probably the biggest; there are so many variables and so many determining factors I would suggest that creating software to deal the all the possible scenarios would be nigh on impossible

[SueEllen]

TaxTax there are different booklets covering travel and subsistence inside and outside the UK.

You need to look at the appropriate one for your situation and then get it confirmed with your accountant what the rates are.

BTW HMRC removed the benefit of staying at family or friends' houses while staying overnight on business trips in the UK as obviously it was a p*ss take. How many family members or friends do you have who are happy for you to stay over and then charge you?

[cojak]

He's trying to write software for this, SE.

[TaxTax]

TaxTax there are different booklets covering travel and subsistence inside and outside the UK.

You need to look at the appropriate one for your situation and then get it confirmed with your accountant what the rates are.

BTW HMRC removed the benefit of staying at family or friends' houses while staying overnight on business trips in the UK as obviously it was a p*ss take. How many family members or friends do you have who are happy for you to stay over and then charge you?

Which booklets are you referring to? I can only find 480 and 490 and neither answers my questions.

[TaxTax]

Still wondering can't nobody answer my questions it would be very much appreciated.

Maybe to clarify, the software doesn't do the whole tax calculation and we already have it set up for other countries but we need it for the UK as we already have a lot of customers in the UK. What the software needs to allow the traveler to do is to allow him to basically log all relevant data of his business travel, then to commit his expenses to another user the "approver" who approves the report and gives it to the company accountant who reimburses the money to the employee and exports the data to maybe another finance software like SAP.

In Germany there are more "set scale rates" to which employees are entitled to so the software can calculate the reimbursement sum which the employee is entitled to as expenses for the trip so he can plan it in advance.

As of now I am thinking for the UK that we only allow the traveller to log times, expenses with attached receipts and calculate only the sum of expenses and the mileage and send that to the approver.

[LisaContractorUmbrella]

HMRC Search

This link takes you to the HMR&C website and lists details of all the sections that deal with Travel and Subsistence - there are lots to say the least. The reason that no-one has come up with an answer is because the rules surrounding expense claims in the UK are incredibly complicated and unlikely to be fully encompassed in any software programme. Sorry